Lighting Fixtures, Lamps, Bulbs and Accessories

05/03/2015

Analysts led off the Plenary Session on each day of Strategies in Light, reports MAURY WRIGHT, with growth projections for both packaged LEDs and lighting products slightly lowered relative to the 2014 presentations.

The Strategies in Light (SIL) 2015 conference, held Feb. 24–26 in Las Vegas, NV, featured Plenary Sessions anchored by Strategies Unlimited market-research presentations on each of the two main-conference days. Strategies Unlimited Senior analyst Stephanie Pruitt reported that packaged LED revenue hit $15.4B (billion) in 2014 and projected growth to $22.1B in 2019.Philip Smallwood, co-chair of SIL and director of research at Strategies Unlimited, reported that LEDs penetrated 5% of the lamps market in 2014 and projected 52% penetration by 2022 based on units shipped. Smallwood reported LED penetration in luminaires at 33% in 2014 and projected 69% penetration by 2022.

Generally, the market projections were positive, but growth rates in terms of revenue were slightly down from the 2014 data (http://bit.ly/10zl855). We will discuss the new data in detail including reasons for changes that range from packaged LED prices dropping faster than expected to new methods of modeling the lighting market that have been instigated by Smallwood in the research program.

Packaged LEDs

The packaged LED presentation is directly comparable to the data presented last year as the methodology remained consistent in the component area. Still, there is one caveat. Pruitt presented preliminary data. The actual data will not be finalized until April when the report is due for sale (after this article was written). So beware of some changes, although we’d expect them to be minor.

Pruitt took the stage on day two of SIL (Fig. 1) and compared data in the most recent years. In 2014, Strategies Unlimited projected a 13% compound annual growth rate (CAGR) for LED revenue through 2018. Pruitt said the new data suggests an 8% CAGR through 2019. The lower growth, however, is not in any way indicative of the research team expecting fewer LEDs to be sold. But LED component prices are eroding faster than expected. Moreover, parts of the LED forecast are driven by research on the lighting market, and Pruitt said the new forecast is "more conservative than last year due to lighting research" — in part the new models mentioned earlier.

Indeed, we can already see slower growth in revenue numbers reported for 2014. Pruitt said LED revenue grew from $14.5B in 2013 to $15.4B in 2014. That’s far lower than the 13% projection from last year. In fact, the 6% growth from 2013 even lags behind the new projection going out to 2019.

But before we delve into more details, let’s discuss the methodology of the packaged LED research. As with previous years, the scope includes all packaged LEDs but not bare LED die or chips. It certainly does include package-light LEDs such as products based on chip-scale packages (CSPs). We covered the CSP trend in our report from the LightBuilding event in Frankfurt last year (http://bit.ly/1mTY7Br), and there is much more in our conference keynote coverage in this issue (see p. 43).

The research is focused on revenue and not number of LEDs shipped or sold. The report covers products ranging from very-low-cost, low- and mid-power LEDs to the high-power LEDs that have been most prominently used in lighting until recently when mid-power LEDs entered that space. The scope also includes super-high-power LEDs, primarily chip-on-board (COB) products. Strategies Unlimited now also publishes dedicated COB LED research (http://bit.ly/1IgdBre).

The segmentation of the packaged LED market also remains largely consistent with prior years. The 0.5W dividing line between the mid- and high-power segments remains. But that line may create ambiguity in some of the data where applications are dissected relative to the types of LEDs used. Many LEDs that look like traditional mid-power devices in plastic packages with no secondary optics can be driven at levels of 1W and higher today.

FIG. 2. The packaged LED market grew by $800M from 2013 to 2014 with lighting applications leading the charge.

Application segments

The projected 8% CAGR through 2019 will lead to a packaged LED segment that totals $22.1B. Let’s look at the applications that will drive such growth and the nearand long-term prospects and trends for each. The primary application segments include:

Displays/backlights

Mobile

Signs

Automotive

Lighting

Fig. 2 depicts the segments and the recent growth or decline in each segment from 2013 to 2014. As you might expect, lighting will remain the largest growth segment for the foreseeable future. Two years ago, Strategies Unlimited reported that general lighting had become the largest consumer of LEDs by revenue (http://bit.ly/1jD9DNa). Previously, the display-backlight sector had consumed more LEDs by revenue. Still, all of the applications listed above consume copious amounts of packaged LEDs.

FIG. 3. The display-backlight market for LEDs is in decline but is still significant.

Display backlights

Indeed, the display-backlight market for TVs and computer monitors remains robust and likely consumes more individual LED components that any other application. But the LEDs utilized are generally low- or mid-power LEDs and are among the most-commoditized products in the packaged LED space.

FIG. 4. LED revenue related to mobile devices is declining with falling LED prices.

In terms of revenue, the display sector is already in decline from $2.6B in 2014, as detailed in Fig. 3, with a -5% CAGR projected through 2019. The display sector will not suffer from the same type of saturation as the lighting sector that we will discuss later. Now the backlight segment is fully saturated, but consumers continue to buy new and better TVs or monitors. Still, LEDs used in displays will continue to fall in price. At the same time LEDs get brighter, resulting in fewer LEDs being required per display in some cases.

Pruitt noted, however, that technology innovation in the TV space could significantly impact the projection. Specifically, a larger-than-expected transition to 4k-pixel TVs, sometimes called ultrahigh-definition TVs (UHDTV), could result in more LEDs being sold into the application. Such higher-end TVs would almost assuredly rely on localdimming implementations where individual LEDs light a smaller area of the overall screen to provide optimum contrast ratio. Conversely, were an OLED manufacturer to solve the manufacturing issues with large screens, allowing that technology to drop in price, fewer LEDs might be sold into backlighting.

FIG. 5. The interior sub-segment of LED usage in automotive is saturated, but great growth potential awaits on the exterior.

Mobile devices

Moving to LED revenue in mobile devices, we find yet another application in decline. Fig. 4 depicts the details of the -5% CAGR projected by Pruitt through 2019. Still, the raw numbers are impressive. Mobile devices consumed $2.8B worth of LEDs in 2014 and the projection calls for around $2.1B in 2019.

The reasons for the decline in mobile are in part similar to the decline in displays, but OLED technology plays a larger role. The mobile market is nearly saturated, but the upgrade cycle continues to drive the sale of new devices. However, price erosion is heavy in the LEDs used in mobile devices for backlighting or lighting the keypad.

Moreover, OLED technology is already being used broadly by vendors such as Samsung in smartphones. LED revenue specifically for the phone market will go from $1.3B in 2014 to less than $1B in 2019. Declines in tablets and other mobile computing devices will be shallower.

Last year, we reported that expanded camera functionality in mobile devices was driving the need for more and higher-quality LEDs for both forward- and rear-facing camera-f lash functionality. Indeed, we covered that technology trend in our report on the conference sessions at SIL 2014 (http://bit.ly/1kXzh1e). Pruitt did not address the flash sub-segment in her SIL presentation, but that data will likely be included in the final LED market report due in April.

Pruitt also suggested that as with the display market, a transition to higher-resolution screens in mobile devices could positively impact the revenue for LEDs in the mobile segment. There will be some level of penetration of UHDTV technology even in the smaller devices as screen technology continues to improve.

FIG. 6. Exterior applications, especially in headlamps, will drive the growth of LED revenue in automotive.

Automotive and signage

Moving to areas of growth, automotive is probably the packaged-LED application with the greatest growth potential outside of general lighting. As Fig. 2 indicates, the sector experienced 10% growth between 2013 and 2014. Moreover, Pruitt projects 10% CAGR through 2019 as depicted in Fig. 5, with revenue going from $1.8B in 2014 to $2.9B in 2019.

FIG. 7. Lighting, and specifically general illumination, holds the greatest revenue potential for packaged LEDs. In 2014, general illumination accounted for 75% of the lighting market.

The automotive application includes both exterior and interior lighting. The dashboard sub-segment of interior automotive lighting is fully saturated. We will see more in-cabin use of LEDs for ambience including color-tunable lighting products. We covered an Osram Opto Semiconductors product designed for just such applications more than a year ago (http://bit.ly/1BJr2w0). But the LEDs used in automotive interiors will mostly be commodity products and falling component prices will keep interior revenue relatively flat.

The exterior automotive application, however, still has a lot of room to grow with penetration remaining relatively low in head-lamps. Moreover, the value proposition is twofold. Automakers will adopt LEDs for headlamps in mainstream cars to leverage the low power and long life inherent in LEDs. High-end vehicles will carry LED headlamps with functionality such as steered beams that can’t be realized with legacy sources.

Fig. 6 shows that LED revenue is projected to grow by 15% through 2019 in the exterior sub-segment with LED revenue in just that sub-segment exceeding $2B by 2019. The biggest growth will come in headlamps with that specific application consuming nearly $1B by 2019. Stop-and tail-light revenue will be the other high-growth area as automobile manufacturers add functionality in that application.

Signage is yet another LED application that is projected to grow. Pruitt reported that LED revenue in the application totaled $1.7B in 2014. Projection of an 11% CAGR will take the market to $2.9B in 2019.

FIG. 8. The Strategies Unlimited forecast states that 86% of the lighting market will be general illumination in 2019, and replacement lamps are expected to be the top consumer of LEDs by a wide margin.

General illumination

Lighting — specifically general illumination — however, will provide the real lift in LED revenue for the next five years. LED revenue in the lighting application totaled $5.3B in 2014 with 75% of that total dedicated to general illumination (Fig. 7). Retrofit lamps account for nearly half of the 2014 LED revenue in lighting. Pruitt projects a 14% CAGR through 2019, consuming more than $10B in LEDs for lighting.

Fig. 8 provides more details on the projection with general illumination accounting for 86% of the LED revenue by 2019. At the end of the projection, LED revenue for replacement lamps will grow to $6.6B with that application remaining well over half of the lighting consumption base. The other or non-general-illumination segment is the next largest in aggregate at $1.5B in 2019. That category, however, comprises a wide variety of small subsegments including entertainment, architectural, retail display, consumer portable, safety and security, off-grid, and strip and string lighting. Outdoor is the second largest general-illumination sub-segment today and in 2019 growing to consume $815M (million) in LEDs.

FIG. 9. The high-power LED segment will decline as a percentage of the total revenues of all LED classes.

LED types in lighting

Pruitt dug deeper into the LED market data relative to lighting applications. For example, Fig. 9 breaks down the total lighting application by types of LEDs used through the five-year forecast. The details rely on the aforementioned categorization of LEDs by power rating.

At first glance, the data is surprising. We’ve been hearing for several years about the rise of mid-power LEDs in a greater number of lighting applications. But the forecast projects that the mid-power share remains near-constant as a percentage of the total market. Still, the escalating overall market will take mid-power revenue from $1B in 2014 to $1.8B in 2019. But why doesn’t mid-power represent a bigger share percentage-wise? The answer is that many LEDs that are based on typical mid-power technology platforms operate well in excess of 0.5W today and are actually captured in the high-power segment.

FIG. 10. All classes of power LEDs will see growth in replacement lamps.

Despite the inclusion of some super-charged mid-power LEDs in the high-power category, that high-power segment will decline as a percentage of the total, as you can see in the chart. The super-high-power category composed primarily of COB LEDs will enjoy the biggest gains percentage-wise. That gain is due to a couple of primary factors. Price erosion is much lower in both high- and super-high-power LEDs relative to low- and mid-power LEDs. And COBs are much simpler for many lighting manufacturers to work with given that the LEDs have a single electrical interface and can be more simply mounted in a design. Moreover, optics manufacturers have made great progress in lenses for the relatively-larger COB LEDs, as was evident in a recent feature article on optics (http://bit.ly/1CDtat3).

FIG. 11. Mid-power LEDs will do especially well in commercial luminaires and specifically the troffer application.

In her SIL presentation, Pruitt also characterized types of LEDs used in specific applications, and a couple are of particular interest. Fig. 10 depicts the LED segments relative to replacement lamps, including A-lamps, directional lamps, and tubes. Arguably, replacement lamps are the most cost-sensitive portion of the general illumination market. Yet in terms of percentage of the LED market, high-power LEDs will remain predominant in the application. Moreover, COB revenue will grow at a higher rate than either the commodity mid- or low-power LEDs.

FIG. 12. LED revenue will continue to ramp in outdoor applications with the most growth coming in chip-on-board (COB) LEDs.

Mid-power LEDs will make the greatest gains in the commercial sector, as documented by Fig. 11. Ceiling troffers are widely used in the commercial sector. And LED-based luminaires that are focused on the traditional rectilinear troffer form factors are a good match to mid-power LEDs. The LEDs are applied in a linear fashion with the components closely spaced for even illumination.

The outdoor segment is one where COBs will really shine, according to Pruitt’s forecast. Fig. 12 shows highpower LED usage remaining relatively flat in outdoor applications while COBs ramp considerably. We’d speculate that the improved COB optics mentioned earlier will be a driver for the success of COBs in outdoor applications. In the past, luminaires that used COB LEDs relied on reflector-based designs for beam control. The new lenses can enable far superior beam control that had been only achievable with smaller sources.

Lighting market data

Now let’s transition to an examination of market data centered on lighting products presented in the Plenary by Smallwood on day one of SIL (Fig. 13). The presentation was entitled "How big can the LED lighting market get?" Smallwood addressed both the lamps and luminaires markets.

Smallwood moved into a leadership position in the Strategies Unlimited lighting practice in late 2013. He has since revamped the approach that the firm takes to characterize the lighting market. The research has been expanded to cover lighting products based on all types of light sources — not just LED-based products. The data is segmented for form factors and applications. And Smallwood has led development of a market model that can yield regional geographical segmentation of the market. Smallwood also said the new approach will enable more accurate prediction of saturation by long-life, LED-based products and the coincident shrinking of market potential.

Starting with the lamps market, Smallwood said there are around 45B installed lamp sockets in the world with that number only growing incrementally in the coming years (Fig. 14). Today, 9B incandescent products are installed in those sockets with that number projected to fall to less than 2B by 2022. Smallwood’s projection shows that linear fluorescent and compact fluorescent (CFL) technologies will remain prevalent through 2022. Primarily, LED-based replacement lamps will replace the incandescent incumbent with some displacement of fluorescent and halogen technologies.

FIG. 14. The global installed base of lamps will remain a mix in terms of light-source technology through 2022.

Recognize, however, that there is a vast difference between the installed base and shipments of lamps throughout the forecast period; Strategies Unlimited’s new model allows the analysts to report both, and by region or globally. For example, Fig. 15 depicts the difference in the North America region specific to A-lamps. The installed base chart on the left of Fig. 15 shows a strong presence of incandescent products, whereas shipments of such products will drop precipitously as LED lamp shipments continue to rise.

FIG. 15. The installed base of incandescent A-lamps in North America will decline slowly, whereas new shipments of such products have already plummeted as LEDlamp shipments rise.

Smallwood reported that LED lamps represented 5% of the overall 2014 market globally. He projects that penetration to rise to 28% in 2018 and to 52% in 2022. Those numbers may sound low, but remember the total lamp market includes tubes, and fluorescent technology will remain a major player. Indeed, Smallwood projects that fluorescent tubes will still account for more than 20% of lamp shipments in 2022.

Ironically, Smallwood also reported a very bullish outlook for LED-based replacement tubes as he broke the data down by type of lamp. Smallwood admitted that he never believed the concept of an LED-based replacement tube to be a very good idea relative to products such as integral, LED-based luminaires. But the research indicates that the market will heavily rely on such tube products primarily because of the ease of retrofit. Smallwood projects a 29% CAGR for tube shipments through 2022, although the growth will flatten at the end of that period as sockets are saturated.

Overall saturation will be felt far more acutely. Total lamp shipments will decline by 44% through 2022. Other than the tube market, all of the other lamp types will be in decline in terms of units shipped by the end of this decade.

FIG. 16. Global lamp revenue will peak in about four years as socket saturation with long-life LED-based products takes place.

Still, the lamp market will remain sizeable in terms of revenue. Fig. 16 shows the lamp market charted by revenue and segmented by light-source technology. Revenue will peak at $21B in 2018 but still reach a hefty $16B value in 2022.

Smallwood also covered the luminaires space. And the Strategies Unlimited team has developed a far more granular model for the broad luminaires segment. The team is now segmenting the market by different types of fixtures including:

Downlights

Troffers

High bays

Suspended pendants

Tracklights

Street lights

Moreover, the new model includes the ability to sort the data by application including retail, office, hospitality, and more. The two types of segmentation can be applied individually or together. And in terms of LED-based fixtures, Strategies Unlimited is separately tracking fixtures that use LED-based replacement lamps and fixtures based on integral, LED-based designs.

In 2014, the combination of both types of LED fixtures represented less than 4% of the total luminaire market in terms of the installed base. But again installed base and shipments differ. Fig. 17 provides an excellent picture of both market size and the light-source technologies that will ship in luminaires. Luminaire revenue will only ramp from $59B in 2014 to $66B in 2022. But as mentioned at the beginning of the article, 69% of the luminaires will be LED-based in 2022

FIG. 17. The global luminaire market will grow slowly through 2022, but LED-based products will represent an increasingly large share of that revenue.

Smallwood closed his presentation with some interesting thoughts. He said,

"The lighting world has accepted that LEDs are the future,"

Still, he characterized the transition as an evolution from the filament to LED sources. He added, however, that there is a revolution afoot in addition to the changing light sources.

Smallwood said.

"The revolution is the ancillary products and technologies such as networks and controls that are coming along with LED lighting."

Smart lighting based on sensor-driven autonomous or programmatic controls is a good example. Smallwood also suggested that the revolution will deliver "lighting with a purpose." He said lighting will specifically target needs such as human well-being, productivity, security, and safety.

Smallwood asked the audience,

"Would you ever have thought Cisco would present a keynote at Strategies in Light?"

Indeed, that company did. For coverage of that keynote and other high-impact keynote speakers, see our feature article on p. 43

COMMENTARY: Convincing consumers to switch to LED lighting is an interesting proposition. On paper, it seems a no-brainer: LED lighting uses 80 percent less energy than traditional lighting, and when used with energy management tools such as automatic on/off switches and dimmers, energy consumption can be reduced about 40 percent further.

Moreover, an average LED light can last up to 22 years – as opposed to an incandescent bulb that lasts for only six months. Unlike compact fluorescent lightbulbs (CFL), the corkscrew bulbs, LEDs do not contain toxic mercury. The EPA website outlines the steps necessary to clean up a broken CFL bulb safely. After reading this, consumers might want to buy a hazmat suit in preparation. All these factors add up to one great product for the environment – energy savings, landfill reduction and the elimination of toxic materials.

When summarizing all of economical and environmental advantages related to LED lighting, it seems like a rational choice to switch over immediately to LED lights. So why aren’t people rushing to retrofit their homes? What can the lighting industry do to incentivize the average person to “do the right thing” and install LED lights in their home and offices?

The introduction of traditional CFLs left a very negative impression with consumers, who did not like their odd corkscrew shape, delayed warm up time, light quality or the occasional buzzing sound they emitted. To balance against this negative image of alternative or green lighting, LED lighting manufacturers have to reassure the public that their products are easy to use, are affordable and, furthermore, delight the public with new must-have features. Here are some steps manufacturers can take to make the public embrace the evolution to LED lighting.

The transition to LEDs is, literally, as easy as changing a light bulb, provided the LED lighting is compatible with the existing lighting infrastructure in homes and buildings. First of all, the bulbs have to have a similar form factor to traditional bulbs and fit into existing light sockets. Additionally, in the United States, there are more than 150,000,000 dimmers installed – a type of switch with which LED lights traditionally have not worked well. Some early users experienced poor performance using LEDs with dimmers including reduced dimming range, flickering, turning off unexpectedly and not responding properly to on/off commands when dimmer is set at lower dimming level.

The initial purchase price of LED lights is expensive when compared to other types of bulbs. An incandescent bulb costs less than a $1, while a CFL bulb costs around $1 to $2 depending upon whether or not it can be dimmed. An average LED light to replace a 60W incandescent bulb, however, will set consumers back approximately $23. Even though it can be easily demonstrated that the $23 LED light bulb is the cheapest alternative in the long run, based on its life span and operational costs, the average person will balk at making this investment. A key factor that drives consumer acceptance of new technologies is to bring down costs to the threshold, say $10, that spurs mass adoption. LED manufacturers need to find ways to lower the price of their products.

The LED industry has to educate the public about benefits of LED lighting and especially the language or lingo of LED's.

Contrary to common belief, wattage isn't an indication of brightness, but a measurement of how much energy the bulb draws. For incandescents, there is an accepted correlation between the watts drawn and the brightness, but for LEDs, watts aren't a great predictor of how bright the bulb will be. (The point, after all, is that they draw less energy.)

For example, an LED bulb with comparable brightness to a 60W incandescent is only 8 to 12 watts. Instead of using wattage a different form of brightness measurement should be used: lumens. The lumen (lm) is the real measurement of brightness provided by a light bulb, and is the number you should look for when shopping for LEDs. For reference, here's a chart that shows the watt-lumen conversion for incandescents and LEDs.

Courtesy of an article appearing in the May 2015 issue of LED Magazine, an article dated May 8, 2012 appearing in Forbesand an article dated March 26, 2013 appearing in CNET

02/10/2012

The worldwide LED market grew 9.8% to $12.5 billion in 2011, with 44% growth in the lighting sector, according to Strategies Unlimited, who revealed the top-ten LED suppliers for the year. However, the outlook remains roughly flat for the next 5 years, peaking in 2013.

The worldwide high-brightness LED market grew from $11.3 billion in 2010 to $12.5 billion in 2011, a growth rate of 9.8%, according to market-research firm Strategies Unlimited. Demand for LED components (i.e. packaged LEDs) in the lighting market grew 44%, from $1.2 billion to $1.8 billion.

However, looking ahead, the annual revenues for packaged LEDs are likely to stay approximately flat for the next five years. The growth in revenue from the lighting sector will be largely offset by a decline in the backlighting sector.

The latest HB-LED market update was revealed during a pre-conference Investor Forum at the Strategies in Light event in Santa Clara. Analyst Ella Shum of Strategies Unlimited will go into more detail on HB-LED market developments in the keynote session of the conference on Wednesday February 8.

Leading LED Suppliers for 2011

On the supply side, 10 companies accounted for more than 68% of the LED market in 2011. Strategies Unlimited arrived at these figures after analyzing market demand as well as the supply-side activity of 54 LED component suppliers.

The rank order of the top 10 suppliers in the LED market for 2011, by revenue of packaged LED components, is:

Nichia

Samsung LED

Osram Opto Semiconductors

LG Innotek

Seoul Semiconductor

Cree*

Philips Lumileds*

Sharp

Toyoda Gosei

Everlight

(*Companies have the same ranking when the difference in revenue is within the margin of error. Revenue includes packaged LED sales only, so pure-play LED chip companies such as Epistar are excluded).

LED Supply By Region

Geographically, Taiwanese and Chinese suppliers gained market share at the expense of the other regions. China’s improvement in product quality, coupled with gains in the domestic market, fueled the growth from 2% market share to 6% in one year. Korean companies lost share in the slowing market, even though they were the most aggressive in increasing capacity during the ramp-up in 2010.

The expansion by Philips Lumileds, Cree and Osram Opto into 6-inch substrates slowed as there was a great deal of excess capacity in their existing 4-inch lines. The Japanese LED business has trended down or flat. However, Nichia and TG are major beneficiaries of the boom in tablet computers. Osram Opto gained a major design win, which propelled its visible LED component business to more than $1 billion.

Market Growth By Segment

Mobile - This segment stayed flat in 2011, at $3.4 billion. The overall decrease in the mobile phones market was offset by a sharp rise in tablet display and flash applications. A major development in this segment is the move to OLED displays. Approximately 50% of smartphone displays are expected to be OLEDs by 2016.

TV/Monitor backlights - The LED revenue for TV and monitor backlights was $3 billion in 2011, but it is projected to drop substantially by 2016. The key disruptive factor in this segment is the introduction of low-cost, direct-backlit technology, targeted at sub-42-inch LCD TVs. This new technology can result in significant savings in the bill of materials (BOM), reducing the gap between LED- and CCFL-backlit TVs. These TVs are known as “chubby TVs” since they are thicker than the slim edge-lit design the industry has been touting for the past few years.

Lighting - The same supply conditions that reduced the price of LEDs increased the demand for packaged LEDs in lighting applications from $1.2 billion in 2010 to $1.8 billion in 2011. System efficacy, rather than LED efficacy, was the gating factor in 2011. The LED luminaire and replacment lamp market was $9.3 billion in 2011, an increase of 45% over 2010. The market for LEDs in lighting is expected to demonstate substantial unit growth over the next five years, but revenue growth will be much lower due to pricing pressure.

Automotive - Revenue reached $1 billion in 2011 We expect a 5-year CAGR of 34% for LED headlamps. In addition to the styling issues, this is part of the trend to convert all front lighting to LEDs, as it will provide more front-end room for the car designer and reduce the overall system cost. Revenue for interior automotive lighting will show a modest decline over the next five years as instrument panel adoption reaches saturation and the market declines with prices.

Future growth - The revenues for the LED packaging industry are expected to be flat in the next five years. With excess capacity in the industry there is a threat of unsustainable prices. Consolidation – both vertical and horizontal – can help improve margins. To further improve profit margin, product strategies such as LED packages tested for high temperature, narrow binning, high CRI, directional /multidirectional LEDs, and embedded controls are being tried by the market.

Courtesy of an article dated February 7, 2012 appearing in LEDs Magazine

Strategies Unlimited has reported 69% year-on-year growth in total sales of LED lamps and luminaires, and expects further growth in the next few years for LED lighting products and LED components for lighting.

Despite a decline in the overall market for lighting products in 2011, the LED lighting market (including both LED lamps and LED luminaires) had an exceptionally good year in 2011, growing by 69% year-on-year.

Vrinda Bhandarkar, Director of Research for LED Lighting with market-research firm Strategies Unlimited, said that the total revenue from the LED lighting market was $5.5 billion in 2010 and $9.4 billion in 2011.

The results were presented during the Solid State Lighting Investor Forum at Strategies in Light 2012, which opened today.

Moreover, the LED lighting market is predicted to grow at a compound annual growth rate (CAGR) of 20% from 2011 to 2016.

Commercial and industrial lighting was the biggest growth sector. Bhandarkar said that almost 23 million LED-based downlights were sold worldwide during 2011.

Compared with previous forecasts, the growth in sales of LED lamps has been scaled back, since the products are still expensive and alternatives are available.

However, sales of LED luminaires of many types were higher than previously expected. Bhandarkar said that users are beginning to appreciate the benefits of LED lighting, beyond light output. She said.

“LEDs allow you to think about quality of light and control, not just quantity of light.”

LED Packages and Components

The total market for LED packages used in lighting applications reached $1.8 billion in 2011, up from $1.2 billion in 2010, and is expected to grow at a CAGR of 13% from 2011 to 2016, when it will reach $3.3 billion, according to Ella Shum, Director of LED Research with Strategies Unlimited.

The revenue growth for LED components (13%) is less than for LED lighting products (20%) because the average number of LEDs per lamp or luminaire will decrease, and LED pricing will continue to fall.

The growth in LEDs for the lighting sector will help to offset the decline in LED revenue from backlighting (which includes LED backlights for TVs and monitors) and mobile sectors (the latter includes notebooks and tablets).

Overall, said Shum, the total market for packaged LEDs will grow from $12.5 billion in 2011 to $13.3 billion in 2012. It will stay roughly flat in 2013 and then decline slowly (see chart). The overall CAGR from 2011 to 2016 is forecasted to be -0.2%.

Courtesy of an article dated February 7, 2012 appearing in LEDs Magazine